Wine Australia Annual Report 2018–19
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Wine Australia Annual Report 2018–19 Contents 1 Letter to the Minister Year in review 2 Highlights 2018–19 6 Chair’s report 10 CEO’s report 16 Our role 17 Performance statement 21 Strategic priorities 22 Targets and outcomes 2018–19 30 Investment allocation 34 Export and Regional Wine Support Package Activities and achievements 40 Priority 1: Increasing demand and premium paid for all Australian wine 50 Priority 2: Increasing competitiveness 64 Priorities 1 & 2: Extension and adoption 65 Supporting functions The organisation 70 Organisational structure and statement on governance 70 The Board 79 Board Committees 81 Geographical Indication Committee 81 Legislative Review Committee 82 Management and staff 85 Other reporting requirements Financial statements 90 Statements by Chair and Chief Financial Officer 92 Independent auditor’s report 94 Statement of comprehensive income 95 Statement of financial position 96 Statement of changes in equity 97 Cash flow statement 98 Notes to and forming part of the financial statements 100 Financial performance 107 Financial position 114 Funding 115 People and relationships 119 Managing uncertainties 123 Other information Appendices 128 Appendix I: RD&E funded projects 138 Appendix II: Provider and management codes 140 Appendix III: Glossary of acronyms and terms 142 Appendix IV: Compliance index 145 Appendix V: Alphabetical index 24 September 2019 Senator the Hon. Bridget McKenzie Minister for Agriculture Parliament House CANBERRA ACT 2600 Dear Minister McKenzie On behalf of the Directors of Wine Australia, I have the pleasure of submitting the Annual Report 2018–19 for the year ended 30 June 2019. This Annual Report has been prepared in accordance with the Wine Australia Act 2013, section 46 of the Public Governance, Performance and Accountability Act 2013, the Funding Agreement 2015–19 and relevant orders. Our activities and achievements are reported against our Strategic Plan 2015–2020, the Annual Operational Plan 2018–19 and Portfolio Budget Statements 2018–19. We have also reported on activities associated with the Australian Government’s $50 million Export and Regional Wine Support Package as they formed a substantial portion of our activities during 2018–19. An Annual Progress report has previously been submitted as required under the Grant’s guidelines. Yours sincerely, Brian Walsh Chair Wine Australia Wine Australia ABN 89 636 749 924 t +61 8 8228 2000 Industry House – National Wine Centre, Cnr Hackney and Botanic Roads, Adelaide SA 5000. f +61 8 8228 2066 PO Box 2733, Kent Town SA 5071, Australia. e [email protected] @Wine_Australia WineAustralia WineAustralia www.wineaustralia.com 1 Highlights 2018–19 Positive trends 4% Australian wine exports grew to $2.86 billion. Exports to China 15% (including Hong Kong and Macau) rose There were a record 2729 active exporters. 7 per cent to a record $1.2 billion. Chinese wine drinkers’ 10% perception of the quality of Australian wine The average value per litre exported increased improved from 8.32 out to $3.58, the highest level since 2009. of 10 in 2018 to 8.56, according to a Wine Intelligence study commissioned by Wine Australia. The 2019 average grape purchase price was $664 per tonne, up by 9 per cent on the price of $565 per tonne for vintage 2017. This In the USA, the perception figure is the highest since 2008. score for Australian wine rose from 7.24 out of 10 The 2019 winegrape crush before participating in of 1.73 million tonnes was a tasting event or visit 3 per cent lower than 2018, but to 8.95, an increase of close to the long-term average 24 per cent. of 1.75 million tonnes. 2 Wine Australia events Wine Australia hosted 120 marketing campaigns in key markets in 2018–19. Australia Decanted, US ‘What Wine Australia did this week (at Australia Decanted) is something I never thought possible… you showed Australian wine as most of us knew it to be – without question one of the greatest wine-producing countries on earth. What you gave us, that was unprecedented, was access. Access to the icons of Australian wine. Access to our peers. Access to the unobtainable. When you asked me to put it on my calendar, you sold it as the greatest event Wine Australia has ever put on. You undersold it. Period. I am honoured and humbled to have been invited. I felt this week more like I was in Australia than when I was in Australia.’ Past president of the Court of Master Sommeliers Andrew McNamara MS Prowine China ‘...the undeniable star of the show was the large Australian pavilion which occupied an entire end of one of the halls … The combination of the China–Australia Free Trade Agreement and Australia’s new AU$50m (US$35.8m) Export and Regional Wine Support Package had already helped lift exports to China by almost 25% over the previous year to more than A$1bn. The buzz surrounding tastings at ProWine of “next wave” Shiraz from Victoria, Margaret River Cabernet Sauvignon, and McLaren Vale alternative varieties, offered little sign of that growth slowing...’ Robert Joseph, Meininger’s Wine Business International At our events of surveyed exhibitors 93% were satisfied. of attendees 96% were satisfied. After attending events, participant’s perceptions of Australian wine rated, on average, 8.90 out of 10, an increase of 12 per cent on their perceptions before the event. 3 Export assistance When we surveyed our stakeholders: of users are satisfied with the 92% level of services provided by our Export Assistance Team. of respondents agree or of respondents find the Wine 83% somewhat agree that they 83% Export Approval System (WEA) learned something helpful easy to use. about their regulatory obligations during the Wine Australia inspections of their of respondents find it very easy winemaking records. 91% or somewhat easy to find the information they need for export. of respondents agree that 78% they were likely to contact the Wine Australia auditing of those who use the Export team if they needed 88% Market Guides find them very regulatory assistance in helpful or somewhat useful. the future. Information We engaged stakeholders through: 85 RD&E News subscriptions increased e-newsletters by 34 per cent to 3673 subscribers. The Exporter Newsletter subscriptions grew by 29 per cent to 7724. Subscriptions to the weekly Market 57 Bulletin rose by 37 per cent to 3264. media releases Subscriptions to Our monitoring Wine Australia measured 4986 articles news increased about Wine Australia Subscribe by 51 per cent in print, broadcast and Subscribe to 4454. online media. 4 Developing people 15 individuals from across the grape and wine community were selected from over 85 applications to participate in Future We supported 7 new PhD scholarships Leaders 2019. and 10 outgoing travel bursaries. Regulatory We conducted 191 site inspections to ensure the truth and reputation for truthfulness of Australian wine. We analysed more than 200 Australian wines to monitor compliance with the Australia New Zealand Food Standards Code. RD&E We managed 183 projects New projects are investigating Wine Australia funding during 2018–19, with 32 under-vine cover crops to supported the AWRI to completed during the period. reduce the need for herbicide deliver workshops and sprays, enhance soil moisture seminars. Five early-career researchers retention and nutrient cycling, were supported to undertake and to maintain, or enhance, Survey feedback found co-funded regionally focused grape yields. We’re evaluating 85 per cent of survey research projects. sensor technology to measure respondents indicated vine canopy temperature in that information provided An independent analysis real time as a potential tool at workshops was useful. of Wine Australia-funded to improve irrigation and new research across 6 projects work is underway to evaluate showed an aggregated selected rootstock genotypes benefit–cost ratio of 1.6 to 5.3 that perform well under reduced on the selected projects. irrigation conditions. 5 Chair’s report The 2018–19 year was the fourth in our current five-year Strategic Plan and it is clear the sector is enjoying solid growth. Wine Australia’s funders – our grapegrowing, winemaking and wine exporting businesses and the Australian government – provide the collective investment to improve the long-term profitability and sustainability of the sector and we have seen steady improvement in a range of key indicators over the past year. The Australian grape and wine community is an integral part of regional communities across the country. Through grapegrowing, winemaking and wine-related tourism, the sector supports 163,790 direct and indirect full- and part-time jobs in 65 wine regions1 and is a significant Chair Brian Walsh contributor to the Australian economy. In 2019, grapegrowing, winemaking and wine-related tourism were estimated to contribute $45.5 billion to the economy. Export success continues to be critical for the sector’s future growth with more than 60 per cent of the wine produced being exported, making wine Australia’s fifth-largest agricultural export2 – and the only one that is fully value added before it leaves our shores. In the past year, we have closed in on the goals of our five-year plan: • exports were worth $2.86 billion in the year ended June 2019, having increased by 51 per cent from $1.9 billion in 2015. • exports to China (including Hong and Macau) were worth $1.2 billion in the year ended June 2019, having increased by 306 per cent from $392 million in 2015. • at June 2019, the average price for exports was $3.85 per litre free on board (FOB), having increased by 48 per cent from $2.61 in 2015. • the national average winegrape purchase price was $664 per tonne for vintage 2019, having increased 43 per cent from $463/tonne in vintage 2015.